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Mazars in Canada
Mazars in Canada has over 50 years of experience in providing Assurance, Accounting, Tax and Advisory Services. We support SMEs, large private and public companies, NPOs and subsidiaries of international companies in achieving growth and success.

Our values
Strong values have been at the heart of our organisation since its creation. They guide us in our daily actions, providing a common base of values that all Mazars’ partners and teams share and respect. These values are detailed in Mazars’ Charter, individually signed by each partner.

Financial Advisory Services
A team of qualified professionals who can help you conduct your transactions, develop a suitable financing strategy, determine the value of your business and its assets, and put in place a precise and customized due diligence procedure.

SME Services
Serving SMEs for more than 50 years, our professionals have developed a collaborative approach to provide continuous support to entrepreneurs and leaders in the growth of their businesses.

International Services
Whether your Quebec-based firm intends to expand internationally or your foreign company wants to establish a business presence in Canada, Mazars will assist and advise you to ensure the success of your projects worldwide.

Our professionals combine excellence, proximity and long-term vision to provide customized solutions that are comprehensive and adaptable to any situation and environment.

Further to these welcome announcements, it appears that the Government is backing down on a few proposals while maintaining others with some modifications.

Lower Small Business Tax Rate

On October 16, the Government announced its intention to reduce the small business tax rate from 10.5% to 10%, effective January 1, 2018, and to 9%, effective January 1, 2019.

The taxation of non-eligible dividends will be adjusted to reflect the lower small business tax rate in order to maintain integration of corporate and personal taxes.

Simplification of Income Sprinkling Measures

Also announced on October 16, the Government intends to move forward with measures to limit income sprinkling using private corporations, while ensuring that the rules will not impact businesses to the extent there are clear and meaningful contributions by family members. These measures, effective January 1, 2018, will be simplified in response to concerns raised by entrepreneurs and the overall Canadian tax community.

Specifically, the government will introduce reasonableness tests for adult family members aged 18-24, as well as those 25 and older. These adults will be asked to demonstrate their contribution to the business based on four basic principles:

Labour contributions;

Capital or equity contributions to the business;

Taking on financial risks of the business, such as co-signing a loan or other debt; and/or

Past contributions in respect to previous labour, capital or risks.

The draft legislation outlining the proposed change should be released later this fall.

Multiplication of the Lifetime Capital Gains Exemption

The Government will not move forward with measures that were proposed in July to limit the multiplication of the lifetime capital gains exemption among family members. These measures were abandoned due to their potential unintended consequences on intergenerational transfers of family businesses, among others.

Flexibility to Passive Investments Measures

On October 18, the Government announced its intention to move forward with measures to limit the tax deferral opportunities related to passive investments within private corporations. Nonetheless, the Government announced that investment income earned in a year below a $50,000 threshold will not be subject to the new measures and will continue to be taxed under the current tax system in order to provide more flexibility to business owners and target more specifically high-income individuals.

In addition, Finance Minister Bill Morneau assured that the new measures should not be applicable to all past investments and income earned from those investments. As such, the new measures would apply only to new investments.

Finally, the Government will ensure that the proposed changes will not affect the incentives for Canada’s venture capitalists and angel investors. Consultation with the venture capital and angel investment sectors will be held to better identify how this might be achieved.

The Government will release these new measures as part of the 2018 federal budget. However, there is no indication as when they will be effective.

Conversion of Income into Capital Gains

On October 19, the Government announced that it will not proceed with measures relating to the conversion of income into capital gains. These measures were abandoned due to several unintended consequences, such as in respect of taxation upon death and potential challenges with intergenerational transfers of family businesses.

In the coming year, the Government intends to work jointly with business owners to develop new measures to facilitate intergenerational transfers of small businesses while protecting the fairness of the Canadian tax system.

Related Event

Mazars invites you to its information session on the tax changes, proposed by the Department of Finance on July 18, 2017, which have an impact on private companies in Canada. In addition, we will provide you with an update on the Accounting Standards for Private Enterprises (ASPE).